ECONOMIST Visualizes Chinese World Domination By 2021

Economist Arvind Subramanian thinks Chinese economic dominance is
a sure thing within the few decades. He's a fellow at the
Peterson Institue for International Economics, and the
Wall Street Journal just interviewed him about his
book, Eclipse: Living in the Shadow of China’s Economic
Dominance.

It’s 2021 and the U.S. president heads across town to the
International Monetary Fund to sign a rescue loan package
negotiated by the IMF’s Chinese managing director. “The handover
of world dominance is complete,” Mr. Subramanian, a former IMF
researcher, writes. China is now the world’s leading economic
power.

In a nutshell, his theory is that economic dominance is simply
defined as the economic means a country has to get other
countries to do what it wants. In his book, Subramanian goes back
to 1870 and analyzes the U.S., the U.K. and China based on three
factors- a country's GDP, its trade, and the extent to
which it is a net creditor to the rest of the world. Put
together, he said, the U.S. is waning, and China is coming up
strong.

Subramanian told
WSJ: "The way economic convergence between the U.S. and China
is evolving, the fact that China will catch up is inevitable. At
end of 20 years, China will have a GDP per capita of only 40-50%
of the U.S. But China has four times the population of the U.S.,
so the Chinese economy will be much larger overall. The
arithmetic is undeniable."

By Subramanian's estimation, economic size is economic power.
Even now, the country exercises power by undervaluing the yuan.
The West needs to bind the country to a multi lateral system, he
says, before it becomes to strong.

Not to say that he doesn't know China faces serious challenges --
an aging population, overly cheap capital, over developed
exports, pollution and more. Because of those, he thinks China's
growth will slow to 7% per year.

And then there's one more thing. Politics. If class divisions and
repressive government policies create massive unrest, "all bets
are off."